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Utility Air Regulatory Group v. Environmental Protection Agency

ELR Citation: 44 ELR 20132
Nos. 12-1146, (U.S., 06/23/2014)

The U.S. Supreme Court held that EPA's regulation of greenhouse gas (GHG) emissions from new motor vehicles did not automatically trigger the CAA's permitting requirements for stationary sources that emit GHGs. The Court, therefore, vacated portions of the Agency's "tailoring" rule mandating PSD permits for stationary sources that emit more than 100,000 tons of GHGs per year. The CAA neither compels nor permits EPA to adopt an interpretation of the Act requiring a source to obtain a PSD or Title V permit on the sole basis of its potential GHG emissions. The PSD program and Title V are designed to apply to a relative handful of large sources capable of shouldering heavy substantive and procedural burdens, and EPA's interpretation would bring about an enormous and transformative expansion in EPA's regulatory authority without clear congressional authorization. Applying the PSD and Title V permitting requirements to GHGs would therefore be inconsistent with the Act's structure and design. In addition, the CAA requires permits for sources with the potential to emit more than 100 or 250 tons per year of a relevant pollutant. But in its tailoring rule, EPA wrote a new threshold of 100,000 tons per year for GHGs. EPA's rewriting of the statutory thresholds was impermissible and went well beyond the "bounds of its statutory authority." Nevertheless, EPA’s decision to require best available control technology (BACT) for GHGs emitted by sources already subject to PSD review is a permissible interpretation of the CAA. The text of the BACT provision, which requires BACT "for each pollutant subject to regulation" under the Act, is far less open-ended than the text of the PSD and Title V permitting triggers. And even if the text were not clear, applying BACT to GHGs is not so disastrously unworkable, and need not result in such a dramatic expansion of agency authority, as to make EPA's interpretation unreasonable. So, while EPA may not treat GHGs as a pollutant for purposes of defining a "major emitting facility" in the PSD context or a "major source" in the Title V context, it may continue to treat GHGs as a pollutant for purposes of requiring BACT for sources already covered under the Act. Scalia, J., announced the judgment of the Court and delivered an opinion, Parts I and II of which were for the Court. Roberts, C.J., and Kennedy, J., joined that opinion in full; Thomas and Alito, JJ., joined as to Parts I, II–A, and II–B–1; and Ginsburg, Breyer, Sotomayor, and Kagan, JJ., joined as to Part II-B-2. Breyer, J., filed an opinion concurring in part and dissenting in part, in which Ginsburg, Sotomayor, and Kagan, JJ., joined. Alito, J., filed an opinion concurring in part and dissenting in part, in which Thomas, J., joined.